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Summary

On May 10, 2018, the IRS announced cost-of-living adjustments to the applicable dollar limits for health savings accounts and high-deductible health plans for 2019. Many of the limits will change for 2019.

In Depth

Recently the Internal Revenue Service (IRS) announced (see Revenue Procedure 2018-30) cost-of-living adjustments to the applicable dollar limits for health savings accounts (HSAs) and high-deductible health plans (HDHPs) for 2019. As a result of the 2017 tax reform legislation, the inflation indexing measure was changed from using the consumer price index to chained consumer price index. While this new approach resulted in some changed limits after the initial announcement and subsequent relief for 2018, it should not similarly affect the limits for 2019 and later years.

The table below compares the applicable dollar limits for HSAs and HDHPs for 2018 and 2019.

HEALTH AND WELFARE PLAN LIMITS

2018

2019

HDHP – Maximum annual out-of-pocket limit (excluding premiums):

Self-only coverage

$6,650

$6,750

Family coverage

$13,300

$13,500

HDHP – Minimum annual deductible:

Self-only coverage

$1,350

$1,350

Family coverage

$2,700

$2,700

HSA – Annual contribution limit:

Self-only coverage

$3,450

$3,500

Family coverage

$6,900

$7,000

Catch-up contributions (age 55 or older)

$1,000

$1,000

Plan sponsors should update payroll and plan administration systems for the 2019 cost-of-living adjustments and should incorporate the new limits in relevant participant communications, like open enrollment and communication materials, plan documents and summary plan descriptions.

For further information about applying the new HSA and HDHP plan limits for 2019, contact one of the authors or your regular McDermott lawyer.